PLUS Loan Program Reform – Too Little, Too Late?

It was announced last month that the Obama administration will formally propose changes to the federal PLUS loan program. These changes, they hope, will adjust for some of the negative effects of previous changes made to the program, effects that hit low-income students and HBCU students especially hard.

A few years back and without any announcement, the Department of Education changed the borrowing requirements for its PLUS loan, making it more difficult for some borrowers to qualify. What officials didn’t consider, however, was that PLUS loans were disproportionately used by the parents of black students. As a result of the changes, black students were denied loans at alarming rates and enrollment dropped sharply at many of the nation’s HBCUs.

The Department of Education says that the adjustments announced in August will loosen the credit requirements and would take effect in July 2015.

“The Obama administration is committed to keeping college accessible and affordable and helping families make thoughtful and informed choices to fund a higher education in today’s economy,” Education Secretary Arne Duncan said in a statement. “These changes allow us to continue to be good stewards of taxpayer dollars and open the doors of college to ensure all students have the opportunity to walk through them.”

Not everyone is so excited about the move, though. Members of the historically black college community say the changes are inadequate.

“This proposed reform, with a 2015 effective date, doesn’t help the students forced to withdraw two years ago neither does it do anything to help those hoping to begin their college career starting later this month,” said Johnny C. Taylor, Jr., president of the Thurgood Marshall College Fund in a statement. “The Education Department repeatedly ignored proposals from higher education leaders that would’ve substantially mitigated the damage done to children from lower and middle-income families devastated by the Great Recession.”

“This reform is too little, too late,” Taylor continued. “We are literally watching some of our best students and colleges suffer needlessly as a result of this continued delay. I am urging HBCU leaders, advocates, students, and alumni to comment on the PPL reform and speak out to help the tens of thousands of students denied college access.”